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Cost refers to the total amount a consumer or investor must pay for goods, services or assets - also called expense. It refers to both a payment of money and also non-monetary expenses like labor, time or sacrifice of other benefits.
A corporation's calculation of the expense of raising money from investors to fund its growth or development is called the cost of capital. This is the rate of return the company must offer on debt securities such as bonds or notes to persuade investors to purchase them. Companies often figure the relative performance of an asset using a cost-benefit ratio, expressed as net present value divided by the initial investment.
- ↑ Cost of Capital. London South East.
- ↑ Benefit-Cost Ratio. London South East.